WA risks falling behind in race for start-ups

Strategy

Western Australia must lead the country’s renaissance in entrepreneurship and become the ‘start-up State’. But we risk falling behind other States that are showing greater urgency to develop thriving communities of start-up ventures, beyond mining.

Consider Queensland. Through the $405-million Advance Queensland initiative, its State Government is building capabilities for a larger entrepreneurship ecosystem. One where thousands of start-ups, Australian and international, create jobs.

Queensland’s Hot DesQ Initiative is offering grants of up to $100,000 to encourage high-potential international and interstate start-ups to relocate there and use it as a launchpad for Asia.

Brisbane City Council is investing $5 million in innovation as part of its New World City strategy. Further north, the Sunshine Coast has emerged one of Australia’s great regional cities for entrepreneurship, boasting one of the highest rates of start-ups per capita.

Victoria is also backing entrepreneurs. The State Government in November 2015 announced a $60-million investment in start-up, LaunchVic, across Victoria, over four years.

Meanwhile, Sydney has developed Australia’s largest tech start-up ecosystem – an investment that will deliver jobs and position New South Wales as a digital-economy leader in the coming decade.

Adelaide, too, is ramping up its entrepreneurship support. The city wants to become the ‘Boston of Australia’ – a global education city that is embedded in local and international ecosystems through its universities and medical research centres.

Western Australia is also encouraging innovation and entrepreneurship, but arguably lacks the commitment of other States. There is still too much talk about innovation in the West, and not enough investment in capability building.

That is not to downplay the work underway. The State Government’s extra $20-million innovation package, announced last May in the 2016-17 Budget, is worthy, although small in the scheme of national innovation efforts.

Western Australia’s universities are playing their role in developing entrepreneurship ecosystems, doing good work in entrepreneurship teaching and research. The challenge for universities and others is to foster innovation through engagement with industry.

Co-working spaces for start-ups in WA, and events, are forming and expanding. In time, they will be the hub of larger ecosystem of new ventures and help connect them.

I see several high-potential start-ups in Perth and proudly chair one of them: Artes Global Group, which has developed a unique skills trading platform, GotSkill.

Nevertheless, other States are investing more to facilitate large communities of start-up ventures. They have clearer strategies to drive start-up entrepreneurship and are arguably several years ahead of WA in this area.

By providing only a fraction of Queensland’s investment in innovation, WA risks becoming uncompetitive in the start-up race.

The billion-dollar annual Royalties for Regions fund is a way to redress this. Having a significant proportion allocated to innovation in regional growth centres would create new revenue streams and bring real benefits if WA played to its strategic strengths in agriculture, energy, minerals and tourism. However, the fund’s spending lacks cohesion to promote innovation.

I hope I’m wrong, but the case for start-ups to choose other capitals over Perth (outside of mining) is strengthening. WA should have thousands of high-potential start-ups by now, but still talk in the hundreds, at least for digital ventures.

This is a critical issue. Technology will destroy millions of jobs globally in the next 10 years as many traditional tasks are automated. WA will need new industries, new ventures, new jobs – and new thinking – more than ever.

This is no time for token efforts on helping start-ups in WA. Nor is it time to throw money at start-ups through taxpayer-funded grants; more important is government and council-led initiatives to build entrepreneurship capabilities.

This is the time for action. Foundations for start-up ecosystems take years to build. Many pieces in a complex puzzle must f0rm, link and flourish. The prize: thousands of new, Perth-based ventures in the digital economy, is worth the effort.

WA has a proud history in entrepreneurship. Enterprise is in our State’s DNA. But dwelling on the past will not turn Perth into a leading entrepreneurship hub in the Asia Pacific. It will condemn us to old industries, old jobs and old thinking.

Our children – the creators, innovators and entrepreneurs of tomorrow – deserve better.

John Barrington is founder of Barrington Consulting Group, a leading strategy consultancy, and Chair of the Perth International Arts Festival. john.barrington@barrington.com.au